TSX Climbs After Weak Jobs Data Lowers Rate Hike Bets

Canada’s S&P/TSX Composite Index rose sharply Friday in Toronto as investors reacted to weaker employment data that reduced expectations for Bank of Canada rate hikes, lifting the index 519.24 points or 1.48% to 35,664.62.

According to the Globe and Mail, Canada’s economy lost 68,300 jobs in September while the unemployment rate increased to 6.5%, compared with analysts’ forecast of a 9,200-job gain. Investors lowered the estimated chance of an October 28 Bank of Canada rate hike to 25% from 40%.

The TSX recorded its strongest daily advance in five weeks and gained 0.46% for the week after two consecutive weekly declines. The materials sector led gains, rising 2.81%, while energy increased 1.07% as US crude futures settled at US$91.85 per barrel.

Aritzia shares surged more than 20% after the apparel retailer exceeded analyst expectations for second-quarter revenue and profit, according to the Globe and Mail. The move helped push the consumer discretionary sector up 2.66%.

Technology shares in Toronto gained 2.88%, while financial stocks rose 1.21%. The Canadian dollar traded at 70.07 US cents compared with 70.22 US cents on Thursday, according to CP24.

US markets also advanced as investors prepared for third-quarter earnings reports and upcoming inflation data that could influence Federal Reserve policy decisions. The Dow Jones Industrial Average gained 423.31 points to 51,654.95, the S&P 500 rose 46.15 points to 7,811.51, and the Nasdaq Composite added 172.83 points to 27,366.17.

The Globe and Mail reported that analysts expect S&P 500 companies to deliver 30.6% annual earnings growth for the July-September period, with energy and technology sectors projected to show the largest gains.

Telecommunication shares weakened after SpaceX acquired a nationwide low-band spectrum portfolio in the United States, creating concerns among investors about future competition. The Globe and Mail reported that US telecom firms T-Mobile US, AT&T, and Verizon fell between 8.8% and 13.3%, while Canadian telecom stocks also declined.

BCE fell more than 5% and Cogeco Communications dropped 7%, while the TSX communication services index declined 4.2%. The acquisition does not directly affect Canada, but investor concerns spread across the sector, according to the Globe and Mail.

US consumer sentiment also weakened, with the University of Michigan reporting that near-term expectations reached an all-time low. Third-quarter earnings reports from major US banks, including Wells Fargo, Goldman Sachs, Citigroup, JPMorgan Chase, Bank of America, and Morgan Stanley, were scheduled to begin the following week.